Stock Market News

FTSE 100 movers: Rio Tinto leads miners higher after Chinese PMI

Mining giant Rio Tinto rose strongly after announcing that it has completed the $1.02bn sale of its majority interest in the Clermont Mine in Australia, leaving buyer Glencore in charge. The disposal of the 50.1% stake, announced last October, "delivers good value for Rio Tinto's shareholders", the company said in a statement this morning.

The mining sector as a whole was generally higher, driven by renewed hopes for the Chinese economy after the country's 'official' manufacturing sector purchasing managers' index (PMI) rose to 50.8 in May, up from 50.4 the month before. Growth came in at a five-month high and was slightly better than the 50.7 consensus forecast.

Unilever climbed after Berenberg upped its target price from 2,700p to 2,800p.

Housebuilder Barratt Developments was on the rise as analysts at Goldman Sachs upgraded the company from 'neutral' to 'buy' after the stock's recent weakness.

Meanwhile, nervousness ahead of Tesco's first-quarter results prompted some profit taking among supermarket stocks on Monday, which were among the worst performers in afternoon trade.

The negative trend of UK like-for-like (LFL) sales at Tesco is likely to have worsened in its first quarter, analysts at Oriel Securities said.

"Those looking for Tesco's first quarter to offer a sign of life in UK food retail are likely to be disappointed. -4% LFL is on the cards and if there are no signs that things are picking up, another downgrade is entirely possible," the broker said. This compares with an exit rate in UK LFL sales of -3.5% in the fourth quarter of the previous financial year ending February 2014.

What's more, Oriel said that the estimated 4% UK LFL decline "may be at the optimistic end of the spectrum", according to recent industry data from Kantar.

Insurance stocks such as Standard Life were also out of favour after reports suggested that the pension industry in the UK could undergo yet more reforms after the annuities shake-up in March. Investors were reacting to speculation about a potential Dutch-style collective pension scheme, which would reduce risks for pensioners but could be less lucrative for providers.

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